Page:United States Statutes at Large Volume 52.djvu/1116

 52 STAT.] 75TH CONG., 3D SESS. -CH. 677-JUNE 25, 1938 1075 "(2) after appropriate notice and opportunity fuspension or ex- order to suspend for a period not exceeding twelve months or to e 0 is of Bny me m- expel from a registered securities association any member thereof who the Commission finds (A) has violated any provision of this title or any rule or regulation thereunder, or has effected any transaction for any other person who, he had reason to believe, was violating with respect to such transaction any provision of this title or any rule or regulation thereunder, or (B) has will- fully violated any provision of the Securities Act of 1933, as amended, or of any rule or regulation thereunder, or has effected any transaction for any other person who, he had reason to believe, was willfully violating with respect to such transaction any provision of such Act or rule or regulation; '(3) after appropriate notice and opportunity for hearing, Removal rom offic V of officers or directors by order to remove from office any officer or director of a regis- ofassociations. tered securities association who, the Commission finds, has will- fully failed to enforce the rules of the association, or has willfully abused his authority. "(m) Nothing in this section shall be construed to apply with Transactions in ex- respect to any transaction by a broker or dealer in any exempted n su tes security. "(n) If any provision of this section is in conflict with any provi- Conflicting rovi- sion of any law of the United States in force on the date this section sin takes effect the provision of this section shall prevail." SEC. 2. Subsection (c) of section 15 of such Act, as amended, is 49 tat. 1378 . amended to read as follows: "(c) (1) No broker or dealer shall make use of the mails or of use of mails, etc., any means or instrumentality of interstate commerce to effect any sale by frauduSent transaction in, or to induce the purchase or sale of, any security devces. (other than commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange, by means of any manipulative, deceptive, or other fraudulent device or con- trivance. The Commission shall, for the purposes of this subsection, Definition by Con- by rules and regulations define such devices or contrivances as are mss n manipulative, deceptive, or otherwise fraudulent. "(2) No broker or dealer shall make use of the mails or of any Fictitious (uota- means or instrumentality of interstate commerce to effect any trans- tionsetc. action in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange, in connection with which such broker or dealer engages in any fraudulent, deceptive, or manipulative act or practice, or makes any fictitious quotation. The Commission Definition by Com- shall, for the purposes of this paragraph, by rules and regulations define, and prescribe means reasonably designed to prevent, such acts and practices as are fraudulent, deceptive, or manipulative and such quotations as are fictitious. "(3) No broker or dealer shall make use of the mails or of any Transac t ionsincon- means or instrumentality of interstate commerce to effect any trans- misslon's rues, etc. action in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) otherwise than on a national securities exchange, in contravention of such rules and regu- lations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors to provide safeguards with respect to the financial responsibility of brokers and dealers."

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